Exclusive: Newly-licensed UK bank Perenna raises $30m from Zopa-backer IAG Silverstripe

Just a month after being granted its UK banking licence, digital mortgage lender Perenna has closed a $30m Series A funding round to fund its growth.

The equity round is being raised entirely from IAG Silverstripe, the US VC which is also a significant investor in UK neobank Zopa.

Perenna is working to launch flexible long-term fixed rate mortgages, starting with an upcoming 30-year product for borrowers with an LTV of 95 per cent.

Rather than relying on deposits or its own balance sheet to fund its mortgages, Perenna is embracing a “unique funding model” where it will issue covered bonds for pension funds and insurance companies to invest in.

“We are excited to have a strategic investor like Silverstripe working with us,” said Arjan Verbeek, CEO and founder of Perenna.

“It's their first investment in a pre-launch business. We see it as an endorsement of our mission to offer consumer-friendly mortgages and enable more people to become homeowners."

IAG’s investment comes around 18 months after Perenna raised a £7m seed round from a host of angel investors, including former Deutsche Bank head of structured product syndicate and managing director Kevin Flaherty, Capdesk founder Casper Arboll, and Star Capital managing partner Tony Mallin.

The lender says it will launch its first mortgage product as soon as its banking infrastructure is in place and the FCA and Bank of England remove their restrictions on its licence.

"The mortgage market is in dire need of innovation. It's an oligopoly controlled by a few banks thriving in the status quo, much to the detriment of consumers,” added Verbeek.

Perenna isn’t the only fintech working on long term mortgages, last March Habito launched its Habito One mortgage with a fixed term of between 10 and 40 years.